Case to Watch: Animal Science Products v. Hebei Welcome Pharmaceutical Co.
Posted on January 26, 2018
Readers, keep your eyes on Animal Science Products, Inc. v. Hebei Welcome Pharmaceutical Co., a case that the Supreme Court has just agreed to hear. Here is SCOTUSBlog’s description of the case:
The case arose when U.S. companies that purchase Vitamin C from … Chinese companies filed lawsuits against a group of Chinese companies, alleging that the Chinese companies had violated U.S. antitrust laws by conspiring, through a group known as the China Chamber of Commerce, to fix the prices and quantities of Vitamin C. The Chinese companies asked the U.S. court to throw the cases out. They acknowledged that they had fixed prices and quantities of Vitamin C, but argued that they were required to do so under Chinese law—an assertion confirmed in a “friend of the court” brief filed by the Chinese government.
The district court rejected the Chinese companies’ request, reasoning that (despite the argument to the contrary by the Chinese government) the price-fixing was not mandated by Chinese law. The case went to a jury, which awarded the U.S. companies $147 million in damages. On appeal, the U.S. Court of Appeals for the 2nd Circuit reversed, ruling that it was “bound to defer” to the Chinese government’s characterization of Chinese law.
The question the Court agreed to answer (Question 2 presented in the Petition for cert.), is:
Whether a court may exercise independent review of an appearing foreign sovereign’s interpretation of its domestic law (as held by the Fifth, Sixth, Seventh, Eleventh, and D.C. Circuits), or whether a court is “bound to defer” to a foreign government’s legal statement, as a matter of international comity, whenever the foreign government appears before the court (as held by the opinion below in accord with the Ninth Circuit).
I have a perspective on this question—I lost an appellate case recently because the court, without spelling out the comity issues, deferred to a foreign government’s interpretation of its own law. My client worked for a foreign government in Boston and was injured on the job. The foreign government didn’t have workers’ compensation insurance. It made some payments to the worker but then stopped. She brought a claim against the trust fund the Commonwealth had established to compensate employees of uninsured employers. Under the statute, a worker is not entitled to benefits from the trust fund if she was entitled to benefits under the law of another jurisdiction. Our argument was that the foreign government’s law made it permissible to pay the worker benefits, but that she was not entitled to them. There were no cases on point construing the foreign law. But the foreign government had provided a witness who testified that under the foreign law the worker was indeed entitled to the benefits. While we had strong textual arguments, the court essentially deferred to the foreign government’s view of its own law. This seemed to me particularly inappropriate because the foreign government itself was a party to the dispute. A rule that defers to foreign governments about the meaning of their own law makes the foreign governments the judges of their own disputes and would be unjust for that reason. The same would be true in cases involving state-run enterprises, for example, or even in cases where the foreign state has an interest in the outcome.
I will keep my eyes on this case. And by the way, the case of my injured worker isn’t over: stay tuned in the next six months or so for new developments.